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1998-424AN ORDINANCE AUTHORIZING THE MAYOR TO EXECUTE AN AGREEMENT BETWEEN THE CITY OF DENTON AND THE DENTON BLACK CHAMBER OF COMMERCE FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE, AND PROVIDING AN EFFECTIVE DATE THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS ~ That the Mayor ~s hereby authorized to execute an agreement between the C~ty of Denton and the Denton Black Chamber of Commerce for the payment and use of hotel tax revenue, under the terms and concht~ons contained in the agreement, a copy of which ~s attached hereto and made a part hereof ~ That this ordinance shall become effective immediately upon ~ts passage and approval PASSED AND APPROVED th~s the -- day of . , 1998 ATTEST JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM HERBER~L PROUT~Yf~Y AGREEMENT BETWEEN THE CITY OF DENTON AND THE DENTON BLACK CHAMBER OF COMMERCE (CY1999) PROVIDING FOR THE PAYMENT AND USE OF HOTEL TAX REVENUE THIS AGREEIVIENT made between the C~ty of Denton, Texas, a mumctpal corporation (the "CITY"), and the Denton Black Chamber of Commerce, a legal entity erasting under the laws of the State of Texas (the "CHAMBER") WHEREAS, Tex Tax Code §351 002 anthonzes the CITY to levy by orchnance a mumctpal hotel occupancy tax ("hotel tax") not exceeding seven percent (7%) of the consderaUon prod by a hotel occupant, and WHEREAS, by ordinance, the CITY has proxaded for the assessmem and colle~on of a mumctpal hotel occupancy tax m the Ctty of Denton of seven pement (7°/0, and WHEREAS, Tex Tax Code §351 101(a) authorizes the CITY to use revenue from tts mumctpal hotel occupancy tax to promote tourism and the convention and hotel industry by advertising and conducting sohcttat~ous and pmmottonal programs to attract tourists and convention delegates or regtstrants to the mumctpahty or its vtctmty, and WHEREAS, the CHAMBER ts well eqmpped to perform those acttxatles, and WHEREAS, Tex Tax Code §351 101(c) authonzes the CITY to delegate by contract vath the CHAMBER, as an independent entity, the management and supervts~on of programs and actimUes of the type described heremabove funded w~th revenue from the mumctpal hotel occupancy tax, NOW, THEREFORE, tn constderat~on of the performance of the mutual covenants and promises contained herein, the CITY and the CHAMBER agree and contract as follows I. HOTEL TAX REVENUE PAYMENT 1.1 Conslderataon. For and ~n constdemtion of the aclawties to be performed by the CHAMBER under tins Agreement, the CITY agrees to pay to the CHAMBER a porUon of the hotel tax revenue collected by the CITY at the rates and m the manner specffied hereto (such payments by the CITY to the CHAMBER sometunas hereto referred to as the "agreed payments" or "hotel tax funds") 1 2 Amount of Payments. (a) As used tn ttus Agreement, the following terms shall have the following specffic meamngs (1) The term "hotel tax revenue" shall mean the gross momes collected and recetved by the Ctty as mumclpal hotel occupancy tax at the rate of seven percent (7%) of the price prod for a room m a hotel, pursuant to Texas Tax Code 351 002 and Ctty Ordinance Hotel tax revenue vail include penalty and interest related to the late payments of the tax revenue by the taxpayer (n) The term "Collection period" vail mean the collection period for the CITY's fiscal year It vail include hotel tax revenue due to the City for the relevant fiscal year and collected through the 22nd day of the month follovang the close of the relevant fiscal year (ltl) The term "base payment amount" shall mean a net amount of money equal to the total hotel tax revenue collected by the CITY during any relevant period of tune (t e, fiscal year or fiscal quarter), less (1) attorney and au&ting costs recurred dunng such relevant period of t~me for costs of collection or auditing of hotel taxpayers Attorney and auditing costs include fees pard to attorneys or agents not m the regular employ of the CITY for winch attorneys or agents effect compliance or collectaon of the hotel tax from taxpayers, and (2) court costs and other expenses incurred in ht~gatlon against or andmng of such taxpayers 0v) The term "contract quarter" shall refer to any quarter of the calendar year m winch tins Agreement is m force Contract quarters vail end on March 31st, June 30t~, Septm'aber 30~, and December 31 ,t of each contract year (b) In return for satisfactory performance of the actlvltxes set forth In tins Agreement and all attachments hereto, the CITY shall pay to CHAMBER an amount of money m each contract year equal to the fixed contract amount of Seven Thousand Dollars ($7,000) Tins amount vail be dixaded into no more than two payments Each payment is subject to receipt of unused funds from the prior contract period and the receipt of the reqmred quarterly reports 1 3 Dates of Payments. (a) The term "payments" shall mean payments by the CITY to the CHAMBER of those amounts specified m ¶1 2, above, as determined by the hotel tax revenue collected (b) In return for the satisfactory performance of the activities set forth m flus contract and all attachments thereto, CITY shall pay the CHAMBER the agreed payments specified m ¶1 2 above by no more than two payments, paying the fixed contract amount dunng the 1 st and 2nd quarter of the calendar year Ifa second.payment is due, that payment shall be paid upon receipt of the reqmred reports and after the 25TM day follovang the last day of the contract quarter If quarterly financial and performance reports are not received vathtn tinrty (30) days of the end of the applicable quarter, the reclpxent may be held in breach of t/us Agreement The CITY may vathhold the quarterly payment(s) until the appropriate reports are received and approved, winch approval shall not unreasonably be vathheld 1.4 Other limitat~ons regardmg consideration (a) The funding of flus project m no way contours the CITY to future funchng of flus program beyond the current contract period Any future funding is solely the responslbthty of thc CHAMBER. Page 2 (b) It Is expressly understood that tbas contract in no way obhgates the General Fund or any other momes or credits of the CITY (c) CITY may w~thhold further allocations If CITY determines that CHAMBER's expenditures deviate materially fxom their approved budget II. USE OF HOTEL TAX REVENUE 2.1 Use of Funds. For and m cons~deratmn of the payment by the CITY to the CHAMBER of the agreed payments of hotel tax funds specified above, the CHAMBER agrees to use such hotel tax funds only for advemsmg and conducting sohc~tatmns and promoUonal programs to attract tourists and convention delegates or registrants to the mumc~pahty or its wclmty as authorized by Tex TAX CODE §351 101(a) Funds for any calendar year which are unused by madmght December 31st of that year shall be refunded to CITY w~thm thmy (30) days 2 2 Administrative Costs. The hotel tax funds received fxom the CITY by the CHAMBER may be spent for day-to-day operatmns, supphes, salines, office rental, lravel expenses, and other admlmstxatave costs that are recurred d~rectly m the performance by the CHAMBER of those act~vlt~es specffied m ¶2 1 above and are allowed by TEX TAX CODE § 3 51 101 (f) 2 3 Specific Restrtctsons on Use of Funds (a) That porUon of total adrmmstxaUve costs of the CHAMBER for wtueh hotel tax funds may be used shall not exceed that po~on of the CHAMBER's admamsWat~ve costs actually incurred tn conducting the acUvltles specified in ¶2 1 above (b) Hotel tax funds may not be spent for travel for a person to attend an event or conduct an acUwty the primary purpose of which ~s not chreefly related to the promouon of local tourism and the conventmn and hotel lndus~a'y or the performance of the person's Job in an efficient and professlomfl manner IH. RECORDKEEPING AND REPORTING REQUIREMENTS 3.1 Budget (a) The CHAMBER shall prepare and submxt to the City Manager of the CITY an annual budget (see Exl'nb~t "A") as approved by the City Council for each calendar year, for such operaUons of the CHAMBER m which the hotel tax funds shall be used by the CHAMBER Tins budget shall specifically ~dentffy proposed expenchtures of hotel tax funds by the CHAMBER. In other words, the CITY should be able to audit specffically where the funds in the separate account relating to hotel tax funds will be expended The CITY shall not pay to the CHAMBER any hotel tax revenues as set forth in Section I oftlus contract dunng any fiscal year oft}us Agreement unless a budget for such respective fiscal year has been approved m writing by the Denton City Council authormng the expenchture of funds Fmlure to submit an annual budget may be considered a breach of contract, and ~f not remedied is considered grounds for tenmnaUon of flus Agreement as stated in paragraph 4 2 P~e3 (b) The CHAMBER acknowledges that the approval of such budget by the Denton Ctty Councd creates a fiductary duty m the CHAMBER w~th respect to the hotel tax funds prod by the CITY to the CHAMBER under flus Agreement The CHAMBER shall expend hotel tax funds only tn the manner and for the purposes specified tn tins Agreement, T~x T^x CODE {}351 101(a) and m the budget as approved by the CITY 3.2 Separate Accounts. The CHAMBER shall maintain any hotel tax funds prod to the CHAMBER by the CITY m a separate bank account w~th segregated accounting, such that any reasonable person can rewew the source of expen&tures of tax funds A bank reconcdtat~un report (see Exlublt "B") ~s reqmred w~th each quarterly report 3.3 Finaneml Records. The CHAMBER shall maintain complete and accurate financtal records of each expendtture of the hotel tax funds made by the CHAMBER. These funds are reqmred to be classxfied as restricted funds for auchted finauctal purposes, and may not be used for suppomng servxces, including, but not hrmted to, andttmg fees and attorney's fees Upon reasonably advance written request of the Denton Ctty Counctl, the Ctty Manager or designate, or any other person, shall make such fmanctal records avmlable for mspecuon and rexaew by the party makn~ the request CHAMBER understands and accepts that all such financial records, and any other records relating to flus Agreement shall be subject to the Pubhc Informanon Act, T~x GOV'T CODE, ch 552, as hereaf~r amended 3.4 Quarterly Reports. After unreal recetpt of hotel tax funds, and vothm tlmty days after the end of every quarter thereafter, until all funds have been expended and reported to the CITY, CHAMBER shall furmsh to CITY (1) a performance report of the work performed under tins Agreement describing the acUxattes performed pursuant to flus Agreement during that contract quarter, and (2) a hst of the expenchtures made vath regard to hotel tax funds pursuant to Tex T^x CODE {}351 101(c) Both the performance and expendtmre reports wall be tn a form etther determined or approved by the C~ty Manager or destgnate (see Exlubtt "B") The CHAMBER shall respond promptly to any request from the C~ty Manager of the CITY, or destgnate, for additional mformanon relaUng to the acttwtaes performed under flus Agreement 3.5 Not~ee of Meetings The CHAMBER shall gtve the C~ty Manager of the CITY reasonable advance written nouce of the tune and place of all meeungs of CHAMBER's Board of D~rectors, as well as any other meeting of any consmuency of the CHAMBER at wluch flus Agreement or any matter the subject of flus Agreement shall be constdered Tlus provts~on shall not be deemed to reqmre the CHAMBER to gtve nottce of any exacuttve session of the Executtve Comnuttee of the CHAMBER IV. TERM AND TERMINATION 4.1 Term. The term of flus Agreement shall commence on January 1, 1999 and terminate at mtdmght on December 31, 1999 Tins term shall be a period of one year 4.2 Termmntlon Without Cause. (a) Tlus Agreement may be termtnated by either party, wath or v~thout cause, by gtvtng the other party stxty (60) days advance written not~ce Page 4 (b) In the event flus contract is terminated by either party pursuant to Section 4 2(a), the CITY agrees to reimburse the CHAMBER for any contractual obligations of the CHAMBER undertaken by the CHAMBER m satisfactory performance of those activmes specified m ¶¶2 1 and 2 2 above and that were approved by the Council through the budget, as noted in ¶3 1 This reimbursement Is conditioned upon such contractual obligations having been incurred and entered into m the good faith performance of those services contemplated m ¶¶2 1 and 2 2 above, and further conditioned upon such contractual obhgatlons having a term not exceeding the full term of flus Agreement Notwithstanchng any provision hereof to the contrary, the obhgataon of the CITY to reimburse the CHAMBER or to assume the performance of any contractual obligations of the CHAMBER for or under any contract entered into by the CHAMBER as contemplated herein shall not exceed 66 2/3% of the current quarterly payment (c) Further, upon termmaUun pursuant to ¶4 2(a), the CHAMBER will provide the CITY 1) Wlflun 10 business days from the termination notification, a short-term budget of probable expenditures for the remmnmg 60 day period between termination notification and contract termination Tlus budget will be presented to Council for approval within 10 business days after recexpt by CITY If formal approval is not given within 10 business days and the budget does not contain any expandttures that would be prohibited by the Texas Tax Code, and is wltlun the current contractual period approved budget, the budget will be considered approved; 2) Within 30 days, a full accounting of all expendttures not prevtously audited by the City, 3) Within 5 business days of a request from the CITY, a listing of expenditures that have occurred since the last required repo~ng period, 4) a final accounting of all expenditures and tax funds on the day of termination The CHAMBER will be obligated to return any unused funds or funds determined to be used improperly Any use of remaining funds by the CHAMBER after notaficatlon of tenmnation is conditioned upon such contractual obligations having been incurred and entered into m the good froth performance of those services contemplated m 2 1 and 2 2 above, and further conditioned upon such contractual obligations having a term not exceeding the full term of this Agreement 4 3 Automatic Termination. Tlus Agreement shall automatically terminate upon the occurrence of any of the following events (a) The tenmnatlon of the legal exastence of the CHAMBER, (b) The m. solvency of the CHAMBER, the filing of a pet~taon m bankruptcy, either voluntarily or involuntarily, or an assignment by the CHAMBER for the benefit of crechtors, (c) The continuation of a breach of any of the terms or condlUons of flus Agreement by either the CITY or the CHAMBER for more than thirty (30) days after wnttan notice of such breach is given to the breaching party by the other party, or (d) The failure of the CHAMBER to subnut a financial quarterly report wbach complies with the reporting procedures reqmred herein and generally accepted accounting pnnclples prior to the begmmng of the next contract term, or quarterly as reqmred by Section 1 3 hereof P~e5 4 4 Paght to Immediate Termmaflon Upon Lmgat~on. Notwlthstanchng any other provision of fins Agreement, to rmtigate damages and to preserve evidence and issues for judicial determination, either party shall have the right to temunate fins Agreement upon munechate notace to the other party in the event that any person has instituted httgatton concerning the acmaties of the non-terrmnatmg party, and the terminating party reasonably beheves that such acttvmes are reqmred or prolublted under fins Agreement 4.5 In the event that this Agreement is temunated pursuant to ¶¶4 3 or 4 4, CHAMBER agrees to refund any and all unused funds, or funds determined by the CITY to have been used improperly, w~thln 30 days after termination of this Agreement V. GENERAL PROVISIONS 5 1 Subcontract for Performance of Services Nothing in fins Agreement shall protublt, nor be construed to prolublt, the agreement by the CHAMBER w~th another private entity, person, or orgamzation for the performance of those services described in ¶2 1 above In the event that the CHAMBER enters into any arrangement, contractual or otherwise, w~th such other entity, person or orgamzatxon, the CHAMBER shall cause such other entity, person, or orgamzat~on to adhere to, conform to, and be subject to all prov~sious, terms, and concht~ons of tlus Agreement and to IEx T^X CODE ch 351, mcluchng reporting reqmrements, separate funds maintenance, and hnutations and pmlublUous pertmmng to expenchture of the agreed payments and hotel tax funds 5 2 Independent Contractor. The CHAMBER shall operate as an independent contractor as to all sermces to be performed under fins Agreement and not as an officer, agent, servant, or employee of the CITY The CHAMBER shall have exclusive control of its operat~ous and performance of services hereunder, and such persons, entities, or orgamzatlons performing the same and the CHAMBER shall be solely responsible for the acts and omissions of its chrectors, officers, employees, agents, and subcontractors The CHAMBER shall not be considered a partner or joint venturer w~th the CITY, nor shall the CHAMBER be considered nor in any manner hold itself out as an agent or official representative of the CITY 5 3 Indemmfieat~on. The CHAMBER agrees to mdemmfy, hold harmless, and defend the CITY, its officers, agents, and employees from and against any and all clmms or stats for injuries, damage, loss, or liability of whatever kind or character, arising out of or in connection w~th the performance by the CHAMBER or those services contemplated by ttus Agreement, including all such clanns or causes of action based upon common, constitutional or statutory law, or based, in whole or m part, upon allagations of negligent or intentional acts of CHAMBER, its officers, employees, agents, subcontractors, licensees and mvltees 5 4 Assignment. The CHAMBER shall not assign fins Agreement without first obtmnmg the written consent of the CITY 5.5 Notice. Any hOrace reclmred to be given under fins Agreement or any statute, orchnance, or regulaUon, shall be effective when given in wntmg and deposited m the Umted States mml, ce~fied mml, return recexpt requested, or by hand-delivery, addressed to the respective parties as follows P~e6 CITY CHAMBER Ctty Manager Denton Black Chamber of Commerce City of Donton John Bmnes 215 E McKlnney 625 Dallas Drive Denton, TX 76201 State 200 Denton, Texas 76205 5.6 Inurement. Tlus Agreement and each pmwston hereof, and each and every right, duty, obhgat~on, and haluhty set forth hereto shall be bmdmg upon and tnure to the benefit and obhgat~on of the CITY and the CHAMBER and their respective successors and asstgns 5.7 Appheataon of Laws. All terms, conchtaons, and prowmons of thts Agreement are subject to all apphcable federal laws, state laws, the Charter of the Ctty of Denton, all ordinances passed pursuant thereto, and all judtclal deterrmnattous relative thereto 5.8 Exclusive Agreement. Tlus Agreement contmus the entire understan&ng and constttutes the enttre agreement between the partaes hereto concermng the subJeCt matter contained hereto There are no representalaons, agreements, arrangements, or understandings, oral or written, express or tmphed, between or among the parOes hereto, relating to the subject matter of tlus Agreement, wluch are not fully expressed hereto The terms and conchtaons of ttus Agreement shall prevml notwithstanding any variance m tlus Agreement from the terms and conchttons of any other document relalmg to tins l~ansacUon or these transactions 5.9 Dupheate Originals. Tlus Agreement ts executed m duphcate originals 5 10 Headings. The heachngs and subheadtngs of the various sectxons and paragraphs of tlus Agreement are inserted merely for the purpose of convemence and do not express or tmply any hnutat~on, defimtton, or exteuston of the specific terms of the sectton and paragraph so desxgnated 5 11 Severab~hty. If any secOon, subseCtton, paragraph, sentence, clause, phrase or word m tlus Agreement, or apphcatton thereof to any person or c~reumstance ~s held tnvaltd by any court of competent junsd~ctton, such holding shall not affect the valtchty of the remaining porttons of tlus Agreement, and the parttes hereby declare they would have enacted such remaining portions desptte any such ntvahdzty 5 12 Insurance. The CHAMBER shall, at a nummum, proxade tnsurance as follows $500,000 Commercial General Lmbthty, or $1,000,000 Event Insurance, covenng any event held on City property Statutory Workers' Compensatton and Employers' Lmbflxty ($100,000/$500,000/$100,000) $500,000 Business Automobde Lmbthty on any owned, non-owned or lured velucles The CITY must be named as an addzt~onal msured on all pohc~es (except Workers' Compensatton) and proof of coverage shall be submitted prior to any payment by the CITY Page 7 THE CITY OF DENTON, TEXAS By JAC~ ATTEST APPROVED AS TO LEGAL FOX, el JE~Fgi~-~LTERS, m~m~L-PROU~Y, CIT~EC~T~Y CITY A~O~Y DENTON BLACK C~ER OF COM~RCE By~~~ By Page 8 (Unified} ,,,, ~t , .... , ...... ~9.oo -~ ~;,,~, ~ ~0,oo relmb. ~r ,other ~a~ ~..__.._ ~r~ 8t,100,O0 ~roohume a~d ~ ~9 o~ ~ m~k , ~0 d *3*d S~N1~8 3 NHO£ SGgG~8£&T8 8T £0 886T-~-OT DENTON BLACK CHAMBER OF COMMERCE FINANCIAL REPORT Program Year 1999 1 ST 2ND 3RD 4TH BUDGET QUARTER QUARTER QUARTER QUARTER YEAR TO V$ i,?. ; :~~ (Jan. Mar) (Apr. Jun) (Jul. Sap) (Oct-Dec) DATE ACTUAL $o $o $o $o $o $o 8;,;~ $o $o $o $o So $7,ooo ~ 0 0 0 0 0 0 .... ~7~ $o $o $o $o $o $7,ooo ~ $0 $0 $0 $0 $0 $230 ~ 0 0 0 0 0 3OO 0 0 0 0 0 3~815 $0 $0 $0 $0 $0 $7,000 $~ $0 $0 $0 $0 $0 $7,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 ~ e~r ~ $o $o $o $o $o $o ~ ~m~l elamks o o o o o o otl~,~ o o o o o o ~l~ed~ {aC}wine $0 $o $o $o $0 $o Va~ ..... ~"'~- $o $o $o $o $o $o ' Date Submitted Program Director